Precision ag is cost effective for farms of 5,000 acres

Advanced agricultural technologies and systems normally referred to as precision agriculture deliver maximum gains when fully integrated and deployed on large farms, not on smaller farms, according to a Lux Research report.

Lux Research refers to precision agriculture as “a quantified approach to cultivation that employs sensing, input modulation, and data analytics to enhance the efficiency of agriculture and increased crop yields.”

The researchers report found, “While individual tools are not typically cost-effective, and often not relevant for small farms, combining these technologies into integrated solutions for large farms leads to gains—cost savings plus revenue increases—of up to $66.50 per acre for U.S. winter wheat producers.

In the Lux Research study, the best-case scenario assumed wireless-transmitting soil moisture sensors, combined with weather forecasting service and integrated decision support on farms of 5,000 acres. While savings from input costs averaged $24.50 per acre, output gains were $42.00 per acre for the total $66.50.

Lux Research analysts evaluated the potential of precision agriculture technologies and the opportunities for those looking to make a play in this field. More than just the U.S. is mentioned. Among their findings:

Holistic offerings will drive adoption. Developers with technologies like sensors or drones don't offer complete solutions, creating an opportunity for an integrator that can combine input and output measurements with data analysis, prediction, and true decision support are needed.

Seed companies are playing a large role. Recent deals in the space, like Monsanto’s acquisition of Climate Corporation, demonstrate that seed companies are honing in on the precision agriculture sector. Given how critical crop knowledge and crop-specific algorithms will be to success in this field, seed companies are well positioned to play a larger role.

The report is part of the Lux Research Agro Innovation Intelligence service, and Lux provides teaser information from their reports to inspire companies to purchase copies of reports.